Budget for wellbeing (not just medical care)

Our Goal: Budget for wellbeing from the early years onwards

Each year, governments create budgets that set out priorities and assign money to them.  If something’s not in the budget, it’s pretty unlikely to happen.  That’s why pushing governments to design their budgets to promote wellbeing for all ages is a big part of what we do.

Wellbeing is shaped by many things – how healthy we are, whether (and how easily) we can meet our basic needs, the safety of our environment, our sense of belonging and support… the list goes on.  In health circles, these things are called ‘social determinants’ of health.

Reams of evidence about these social determinants encourages investment earlier in people’s lives, because human beings are especially sensitive to our environments when young.  Investing early can help prevent illness and promote wellbeing.  The alternative is spending more, later – once people are already struggling in school, struggling to find work, or falling sick.

That’s because medical care was never designed to create health.  It was designed to treat illness after we’ve fallen sick.  We have to invest where health is created – the conditions into which we are born, grow, live, work, and age.  As long as Canadians can’t access safe homes, good incomes, quality child care, and a healthy environment, our medical care system will never be enough to prevent people from dying early. 

It's time to recognize that generational fairness requires budgets that promote wellbeing from the early years onwards.  That's why we put together this game plan for budgets that invest in wellbeing (not just medical care).

 

GUIDING PRINCIPLES

Health doesn’t start with medical care

We all want a good mechanic when our car breaks down, just like we want a good doctor when we’re sick.  But what we want even more is to stay out of the repair shop.  That’s why we have to invest where health is created – the conditions into which we are born, grow, live, work, and age.  These conditions may not be the first thing that come to mind when many people think about health, yet reams of evidence confirm that they more strongly influence our health than does medical care.  As long as Canadians can’t access safe homes, good incomes, quality child care, and a healthy environment, our medical care system will never be enough to prevent people from dying early. 

Plan for all ages

It’s important to plan wisely to ensure that our shared resources meet the needs of Canadians of all ages.  Yet for decades, we’ve planned primarily around older generations, while squeezing the wellbeing of younger people.  Year after year, federal and provincial government budgets increase spending on retirees far faster than spending on younger people – a trend likely to accelerate post-pandemic as demands for medical care and long-term care increase.  We’ve asked younger people to use more of their tax dollars to support this growing spending, while dodging questions about whether today’s retirees (who enjoy more wealth that previous generations) should pay a fair share for the services they need and use.

We all want to ensure the wellbeing of our aging parents and grandparents, and that means investing more later in the life course when health and support needs are higher.  But this biological reality isn’t the only consideration in planning for all ages – social, economic and environmental trends also matter.  And for many younger people today, these trends mean that they are being squeezed between higher costs for things like housing and child care, a deteriorating climate, and growing public debts – compromising their wellbeing, and the wellbeing of their kids. 

The conditions into which we are born, grow, live, work and age are especially important in shaping health and wellbeing in our early years. Improving these conditions can prevent problems down the road.  Since we only have one chance to get people off to a good start, we have a responsibility to plan and invest in young people’s wellbeing just as much as the aging population. 

BASIC PLAN

Pillar 1 – Increase social spending faster than medical care spending (aka invest more in preventing illness)

When it comes to making wise choices about health, Canadians have a thorny problem.  Our universal medical care system is beloved, and is as much a part of Canadian identity as the maple leaf and hockey.  But we need to make room for something more, because medical care was never designed to create health. It was designed to treat illness after we’ve fallen sick.  As long as Canadians can’t access safe homes, good incomes, quality child care, and a healthy environment, our medical care system will never be enough to prevent people from dying early.

Governments across Canada aren’t following this prescription, spending more on treating illness than on things that help keep us healthy – most of which isn’t found in a doctor’s office. The health priority we hear about most often is putting more money into medical care to address cracks widened by the pandemic.  Little attention is paid to how we can slow the flow of people into our hospitals and clinics by preventing illness and promoting health.

Research confirms that money spent on illness prevention has a greater return than money spent on medical care to treat people once they're already sick.  This means that the health and wellbeing of Canadians will improve when we grow social investments more urgently than spending on medical care – and ensure that this evidence informs government decisions.  In a nutshell, we need our governments to embrace the wisdom that an ounce of prevention really is worth a pound of cure.  

To learn more, see this study about how 40 years of medical care spending increases have trumped investments in social supports.  You can also check out this blog on why growing medical care spending may not always be a good thing.

Pillar 2 – Acknowledge the aging population didn’t entirely prepay for the medical care it now wants to use

Today’s retirees worked hard to support their families, and contributed the tax dollars asked of them by governments.  Despite playing by the rules, they haven’t paid enough to cover the full cost of the services use in retirement.  With pressure growing to add things like pharmacare and long-term care to the medical care purse, the unpaid bills retirees are already leaving likely will rise.  These are hard truths to hear.

Of course, today’s retirees didn’t set out to stiff the bill.  No one told them they weren’t contributing enough – and governments haven’t been courageous enough to point out the shortfall, or talk about ways to cover it.  But this doesn’t change the harmful legacy being left to younger and future generations, who are already struggling with sky-high housing prices that have left earnings far behind, child care that costs another rent or mortgage sized payment, a deteriorating climate, larger tax burdens, and higher government debts.

There are good reasons to invest more in medical care for the aging family members we love.  The evidence is clear on that – just as it’s clear on the benefits of investing more in programs that would disproportionately benefit younger people, like affordable housing, post-secondary education or parental leave.  But even good programs have to be paid for.  The timing of new medical care investments is particularly likely to grow generational unfairness if we don’t also talk about how to invite today’s retirees to pay a fair share of these new costs, rather than leave the bills entirely to their kids and grandchildren.  Check out the next pillar for more on this.

Pillar 3 – Ask retirees to pay a fair share for expanding medical care for the aging population

Generational reciprocity means, in part, that each generation pays for what it wants and uses, contributing in proportion to the needs, opportunities, and wealth it inherits. This doesn’t mean each generation should contribute equally – but it does mean each generation should contribute fairly.  Precisely how much is fair may be difficult to define, but we likely can all agree that it’s unfair to contribute so little that you leave your bills unpaid, creating debts for those who follow, especially when your own wealth is increasing. 

When it comes to medical care, however, it seems that Canadians are ready to throw the principle of reciprocity out the window.  The primary conversation we have about health is when and how much more to invest in medical care – with little to no attention to:

  • Who benefits (primarily older people, because they use the lion’s share of medical care, given that health needs increase as we age).
  • Who pays (primarily younger people, because they already pay more taxes for medical care for their parents and grandparents than previous generations).
  • If we’re collecting enough money to cover the full cost (we’re not… which is why government debt is rising – and will land squarely on the shoulders of younger and future generations).

It’s particularly pressing to dust off the principle of generational reciprocity as we emerge from the pandemic, given calls to implement pharmacare, long-term care, etc.  While evidence confirms that such investments have potential to reduce costs and improve health outcomes, it’s still pressing to ensure that they are paid for in ways that are fair, upfront.  That means:

  • Telling political parties and governments to be straight with us about the costs – and the tax revenue required to cover them.
  • Starting some hard conversations about who is able to help pay – notably with today’s generation of retirees, who’ve been fortunate enough to gain big wealth from rising home prices. For more on this, see the section on Rebalancing taxation on income vs wealth under Budget for all Generations.

 

MONITOR THE RATIO BETWEEN SOCIAL AND MEDICAL CARE SPENDING

Putting in place these 3 pillars will put us on a path towards budgets that promote wellbeing for all ages, from the early years onwards.  The following foundational building blocks will also help to pave the way.  

Report annually on the ratio between social spending and medical care spending

Monitoring spending over time supports political leaders to make informed and efficient spending decisions.  That’s why we’re asking governments to use this handy tool: the ratio between social spending and medical care spending.  

Our aim is to increase the ratio of public spending on social supports, which will put less pressure on medical spending further down the line.  Because health doesn’t start with medical care – it starts in the conditions where we are born, grow, live, work, and age.

Canadians and international data confirm that growing social spending is tied to longer lives and fewer lost years of life – but no provincial or federal government is monitoring whether their budget decisions align with this evidence.  This needs to change.

Appoint government point people responsible for social determinants of health

Medical care is beloved in Canada, but the evidence tells us that it’s not enough to create health.  Instead of scrambling to fix our alleged medical care crisis at the back end, we need to invest up front in the social conditions that keep people healthy and slow the flow of patients into our clinics and hospitals.  It’s much more likely that we’ll cultivate a broader understanding of health – and put in place the investments to back it up – if governments have a Deputy Minister, Parliamentary Secretary or other high level official specifically tasked with advancing the social determinants of health.

 

SOURCES FOR THE BUDGET FOR WELLBEING GAME PLAN

This game plan was developed in the Generation Squeeze Lab at the University of British Columbia.  The ideas included in it were developed, in part, with support from grants from the Social Sciences and Humanities Research Council and the Canadian Institutes for Health Research.  Below is a short list of research literature that speaks to the ideas included in this game plan.

Dutton, D. J., et al. (2018). "Effect of provincial spending on social services and health care on health outcomes in Canada: an observational longitudinal study." Canadian Medical Association Journal 190(3): E66-71.

Kershaw, P. (2020). "A 'health in all policies' review of Canadian public finance." Canadian Journal of Public Health(111): 8-20.

Senate Subcomittee on Population Health (2009). A Healthy, Productive Canada:  A Determinant of Health Approach. Ottawa, ON, The Standing Senate Committee on Social Affairs, Science and Technology. https://sencanada.ca/content/sen/Committee/402/popu/rep/rephealth1jun09-e.pdf

WHO Commission on the Social Determinants of Health (2008) Closing the gap in a generation:  health equity through action on the social determinants of health. Final Report of the Commission on Social Determinants of Health. 

Bradley, E. H., et al. (2016). "Variation in Health Outcomes: The role of spending on social services, public health, and health care, 2000-2009." Health Affairs 35(5): 760-768.

Bradley, E. H., et al. (2011). "Health and social services expenditures: associations with health outcomes." BMJ Qual Saf 20: 826-831.

Hood, C. M., et al. (2016). "County Health Rankings: Relationships between determinant factors and health outcomes." Am J Prev Med 50(2): 129-135.

Steuerle, C. E. and J. B. Isaacs (2014). "The Scheduled Squeeze on Children's Programs: Tracking the implications of projected federal spending patterns." Health Affairs 33(12): 2214-2221.

Watkins, J., et al. (2017). "Effects of health and social care spending constraints on mortality in England: a time trend analysis." BMJ Open 7: e017722.

Tran, L. D., et al. (2017). "Public health and the economy could be served by reallocating medical expenditures to social programs." SSM - Population Health 3: 185-191.

McCullough, J. C., et al. (2012). "A Health Dividend for America: The opportunity cost of excess medical expenditures." American Journal of Preventive Medicine 43(6): 650-654.

 

 

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